Program : BACHELOR OF SCIENCE IN

ACCOUNTING INFORMATION SYSTEM

Course Code : BTax 223

Course Title : Business Taxation

Course Credit : 3 units Contact Hours : 54

BULACAN POLYTECHNIC COLLEGE

Bulihan, City of Malolos
 Business Taxation
MODULE MATERIALS

List of Modules

No. MODULE
MODULE TITLE
CODE
Fundamentals of Taxation & the 3 Inherent Powers of
1 BTAX 223-1
the State
2 The Philippine Taxation System BTAX 223-2

3 Classification of Taxes BTAX 223-3

4 Remedies Available in Taxation BTAX 223-4

5 TRAIN Law BTAX 223-5

6 Transfer Taxes BTAX 223-6

7 Value Added Tax BTAX 223-7

8 Local Taxation BTAX 223-8

9 Specific Taxing Powers of the Local Government Units BTAX 223-9

10 Collection of Business Taxes BTAX 223-10

11 Real Property Taxation BTAX 223-11

Tariff and Customs code (PD 1464 as Amended by
12 BTAX 223-12
the Customs Modernization and Tariff Act/ RA 10863)

13 Jurisdiction of Court of Tax Appeals (CTA) BTAX 223-13

14 Application of Business Taxation BTAX 223-14

Bachelor of Science in Bulacan Date Developed:

Accounting January 2021
Polytechnic Date Revised: Page 2 of 18
Information System
College
Business Taxation- Document No. Developed by:
Eugene A. Ruano Revision # 02
BTax223 20- BTax223
THE PHILIPPINE
TAXATION
SYSTEM

(BTAX 223-2)

Bachelor of Science in Bulacan Date Developed:

Accounting January 2021
Polytechnic Date Revised: Page 3 of 18
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 MODULE CONTENT

COURSE TITLE: Business Taxation

MODULE TITLE The Philippine Taxation System

NOMINAL DURATION: 4 Hours

SPECIFIC LEARNING OBJECTIVES:

At the end of this module you MUST be able to:
1. Understand the Philippine taxation system and how it works.

TOPICS: (Sub-Topics)
1. Purpose of Taxation
2. Characteristics of Taxation
3. Basic Principles of Sound Tax System

ASSESSMENT METHOD/S:
Quiz-Multiple Choice

REFERENCE/S:
1. A Study on Business Taxes and Transfer Taxes Under the Train Law (2019
Edition) With a Special Feature on Income Tax Revisited by: Virgilio D.
Reyes
2. The Fundamentals of Taxation (2019 Edition) by: Hector S. De Leon &
Hector M. De Leon, Jr.
3. www.slideshare.net

Bachelor of Science in Bulacan Date Developed:

Accounting January 2021
Polytechnic Date Revised: Page 4 of 18
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Business Taxation- Document No. Developed by:
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 Information Sheet BTAX 223-2
The Philippine Taxation System

Learning Objectives:
After reading this INFORMATION SHEET, YOU MUST be able to:
1. Have awareness on Philippine taxation system
2. Have knowledge on purposes of taxation
3. Relate to real life situation why taxes should be paid by taxpayers

INTRODUCTION

Philippine taxation is a system of raising money to finance government. All

government require payments of money that is taxes from people. Governments
use tax to pay soldiers and police, to build dams and roads, to operate schools
and hospitals, to provide food to the poor and medical care to the elderly, and
for hundreds of other purposes. Without taxes to fund its activities, government
could not exist. Taxation is the most important source of revenues for modern
governments, typically accounting for 90 percent or more of their income.
PURPOSES & SCOPE OF TAXATION
PURPOSES SCOPE
Primary Includes every imposition of
charge or burden by the
Revenue or fiscal:
sovereign power upon persons,
Government provide funds or
property, or property rights for
property with which to promote
the use & support of the
the general welfare and
government and to enable it to
protection of its citizens
discharge its appropriate
To enable it to finance its
functions.
multifarious activities
Non-revenue or regulatory:
May also be exercised to attain
non-revenue objectives for
purposes of regulation or
control:
a) Imposition of tariffs on
imported goods to protect
local industries
b) Adoption of progressively
higher tax rates to
reduce inequalities of
wealth and income
Bachelor of Science in Bulacan Date Developed:
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 c) Increase or decrease of
taxes to prevent inflation
or ward off depression
Secondary
To strengthen anemic
enterprises by giving tax
exemptions
To protect local industries
against foreign competition
through imposition of high
customs duties on imported
goods

ESSENTIAL CHARACTERISTICS OF TAX

enforced contribution
 tax is not a voluntary payment or donation and its imposition is in
no way dependent upon the will, open or implied of the person taxed.
proportionate in character usually based on the ability to pay
 tax is laid by some rule of apportionment according to which persons
share the public burden.
generally payable in money
 pecuniary burden-an exaction to be discharged alone in the term of
money which must be in legal tender
levied on persons or property
 imposed on acts, transactions, rights or privileges. It is only a person
who pays the tax. Property is resorted to for the purpose of
ascertaining the amount of tax that must be paid & of enforcing
payment in case of default of the taxpayer
levied by the state which has jurisdiction over the person or property
 object to be taxed must be subject to the jurisdiction of the taxing
state
levied by the law-making body of the state (legislative), the power to tax can
only be exercised by the law making body or congress
 power to tax is a legislative power which under the Constitution only
Congress can exercise through the enactment of tax statutes

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 levied for public purpose or purposes
 support of the government, administration of the law, or the
payment of public expenses
 public purpose or purposes of the imposition is implied in the levy
of tax
commonly required to be paid at regular intervals or periods
Non-revenue Objectives of Taxation
1) Taxation can strengthen anemic enterprises or provide incentive to greater
production through grant of tax exemptions or the creation of conditions
conducive to their growth.
2) Taxes on imports may be increased to protect local industries against foreign
competition or decreased to encourage foreign trade.
3) Taxes on imported goods may also be used as a bargaining tool by a country
by setting tariff rates first at a relatively high level before trade negotiations
are entered into with another country.
4) Taxes may be increased in periods of prosperity to curb spending power,
halt inflation, and ward off depression.
5) Taxes may be levied to reduce inequalities of wealth and incomes.
6) It may be levied to promote science and invention.
7) Taxation may be made as an implement of the police power to promote the
general welfare.
BASIC PRINCIPLES OF SOUND TAX SYSTEM

Fiscal adequacy
Equality or theoretical justice
Administrative feasibility
Fiscal Adequacy
 Means that the sources of revenue, that is, receipts therefrom, taken as a
whole, should be sufficient to meet the demands of public expenditure
 Revenues should be elastic or capable of expanding or contracting
annually in response to variations in public expenditures
 Creating new taxes or new tax machinery or by merely changing the rates
applicable to existing taxes
Equality of Theoretical Justice
 Means that the tax burden should be in proportion to the taxpayer’s ability
to pay
 Ability to pay principle
 Connotes that the contribution of each person towards the expense of the
government should be apportioned such that he would feel neither more

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 or less inconvenienced from his share of the payment than every other
person experiences from his
Administrative Feasibility
 Means that tax laws should be capable of convenient, just and effective
administration
 Each tax should be:
 Clear and plain to the taxpayer
 Capable of uniform enforcement
 Convenient as to time, place and manner of payment
 Not unduly burdensome upon or discouraging to business activity

Bachelor of Science in Bulacan Date Developed:

Accounting January 2021
Polytechnic Date Revised: Page 8 of 18
Information System
College
Business Taxation- Document No. Developed by:
Eugene A. Ruano Revision # 02
BTax223 20- BTax223